Most simply, an annuity is a contract issued by an insurance
company that allows you to invest money for the long-term and
accumulate earnings on a tax-deferred basis. This means that interest
accumulates free from federal, state, and local taxes until you
withdraw money from your account, usually at retirement. Money
withdrawn prior to age 59½ is generally subject to a 10%
Federal income tax penalty as well as ordinary income taxes.
Annuities are unique investments in that they are specifically
designed to generate retirement income you won't outlive, making
certain there is a steady stream of income to assist you in achieving
a comfortable retirement.
Fixed annuities, when added to a portfolio, provide a conservative
way to grow retirement funds. Each fixed annuity locks in an initial
interest rate for the term that you choose. After the initial
rate guarantee period, renewal rates are declared each year on
the contract's anniversary date. Renewal rates are guaranteed
never to fall below the guaranteed minimum interest rate, which
is stated in the contract, regardless of future economic conditions.
With a fixed annuity, your principle will be guaranteed by the
financial strength of the insurance company. Many products offer
a first year bonus rate or rate tiers, which give additional interest
earnings depending on annuity accumulation. Fixed annuities are
long-term vehicles for retirement that also provide tax-deferred
growth, access to money, and income options for retirement.
The benefits of tax-deferral in an annuity do not apply to contracts
purchased as an Individual Retirement Annuity (IRA) or inside
some other tax-qualified retirement plan because these plans already
have tax-deferred status.
Early withdrawal and surrender charges may apply. Withdrawals
may be subject to a 10% federal penalty tax if made before 59½
and are subject to qualified plan provisions.
This material is authorized for prospective investors
only when preceded or accompanied by a current prospectus and
underlying fund prospectuses containing more complete information
including all charges and expenses, such as the withdrawal charges
and mortality and expense risk charges. Read all prospectuses
The principal is guaranteed by the strength of
the issuing life insurance company.
Annuities are long-term vehicles designed for
retirement purposes. Withdrawals of taxable amounts are subject
to income tax.
NOT FDIC/NCUA INSURED NO BANK/CREDIT UNION GUARANTEE
NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
if you would like additional information
regarding annuities, please contact an Allied Roth
licensed insurance professional.